Up to £3.5bn furlough claims fraudulent, says HMRC

Up to £3.5bn in payments from the Coronavirus Job Retention Scheme may have been claimed fraudulently or paid in error, according to the HMRC.

Jim Harra, HMRC’s permanent secretary, appeared before MPs on the Public Accounts Committee to discuss the tax authority’s estimates that 5-10% of furlough claims have been wrongly awarded.

The latest government figures show that the scheme has cost the government £35bn since it began.

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The programme has paid 80% of workers’ wages, who were placed on leave since March, up to a maximum of £2,500 a month.

Speaking to MPs yesterday (7 September), Harra said: ‘‘We have made an assumption for the purposes of our planning that the error and fraud rate in this scheme could be between 5% and 10%. This will range from deliberate fraud to error.

‘‘What we have said in our risk assessment is we are not going to set out to try to find employers who have made legitimate mistakes in compiling their claims, because this is obviously something new that everybody had to get to grips with in a very difficult time.’’

He added: ‘‘Although, we will expect employers to check their claims and repay any excess amount, what we will be focusing on is tackling abuse and fraud.’’

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